SK Bioscience CEO Ahn Jae-yong speaks on the company's acquisition of a controlling stake in German vaccine contract manufacturer IDT Biologika during a press conference in downtown Seoul, June 27. Yonhap

SK Bioscience said Thursday it will invest $2 million into U.S. biotech Sunflower Therapeutics under an agreement to receive equity in the company at a future date.

According to SK Bioscience, it recently signed a simple agreement for future equity (SAFE) with the U.S. biotech company in a bid to optimize SK's vaccine development and manufacturing process.

SAFEs are usually signed for a larger company's investment into a startup or early-stage company. It provides investors with rights to future equity in the recipient company without determining a share price at the initial investment stage, and the investment converts into equity at a future equity financing event, often with a discount or valuation cap.

SAFEs are often viewed as simpler and more flexible than traditional convertible notes, as they allow the investor to secure a substantial stake with a minimal initial investment as the company's valuation increases. SK Bioscience did not reveal further details on the agreement.

Sunflower, established in 2018, is known for its own yeast-based protein manufacturing technology, which facilitates the development and production of diverse antigens and antibodies. The company's yeast expression system streamlines vaccine manufacturing processes and improves production efficiency, boosting cost-effectiveness for vaccine firms.

The company has received multiple grants from the Bill and Melinda Gates Foundation to support their technologies and is collaborating with entities including the U.S. Department of Defense, the Massachusetts Institute of Technology and other global biopharmaceutical companies.

SK Bioscience, a pharmaceutical affiliate of SK Group, said it seeks to leverage Sunflower's technology to optimize its vaccine development and manufacturing process. When Sunflower's yeast culture system integrates into SK Bioscience's Andong L House vaccine manufacturing plant, the company projects a 7.7-fold increase in the plant's yields while reducing production costs by 88.7 percent per dose compared to the existing process.

Logo of Sunflower Therapeutics

SK Bioscience and Sunflower first formed their partnership last year when they signed a joint agreement to develop a vaccine for HPV.

SK Bioscience said Sunflower's technology and growth potential resulted in its latest investment, and it seeks to maximize its investment value in the firm through various measures including initial public offering and third-party mergers and acquisitions.

"In this time where various infectious diseases threaten humanity, vaccine sovereignty is the key to protecting the safety of our people and enhancing national competitiveness," SK Bioscience CEO Ahn Jae-yong said.

"We are excited to deepen our relationship with Sunflower Therapeutics and make an impact on global health as we continue to develop efficacious, safe and cost-effective vaccines."

Sunflower is the latest destination for a series of recent investments by SK Bioscience. Last month, the company signed an agreement to acquire a controlling stake in IDT Biologika of Germany, one of the top 10 global vaccine contract manufacturers. The company said it will continue exploring investment opportunities including joint ventures, mergers and acquisitions and in- and out-licensing.